McDaniel v. Gray & Co. , 69 Ga. 433 ( 1882 )

Crawford, Justice.

Wm. P. McDaniel, agent, etc., bought of C. W. Gray & Co., a vacant lot in the city of Atlanta, for which he paid cash $100.00, and gave his notes payable in four installments, extending over a space of some six months, for the balance, and took a bond for titles.

In that bond was the following clause: “Now if he shall well and truly pay said notes at the times above specified, then the said C. W. Gray & Co. are bound to execute to said McDaniel, agent as aforesaid, or assigns, a good and sufficient title to the land aforesaid, but on failure of the said McDaniel, agent as aforesaid, to pay the aforesaid sums of money, or either of them, at the times therein specified, then the above obligation to be void and of no effect.”

The notes were never paid. A short time before the last fell due Gray & Co. re-entered upon the land, the same being still vacant, re-sold it to another purchaser, and upon the payment of the purchase money made him a title.

This suit was brought by McDaniel, the first purchaser, to recover of Gray & Co. the $100.00 paid to them on this land.

The court below on the trial ruled, that to entitle him to recover, he must first show compliance, or an offer to comply with his contract. That if he failed to pay the notes, or any part of them when they fell due, Gray & Co. could take possession of the land and sell it, and before he could recover back the money paid, he must show that he was ready and willing to comply by paying the money, for said land prior to the bringing of- this suit, and this' he must do, notwithstanding the fact that Gray & Co. may have sold the land, and put it out of their power to comply on their part.

On this ruling of the court error is assigned..

Under this contract of sale, we hold that upon the failure of the purchaser to pay the notes as. they fell due, the vendors had the right to reduce'them to judgment, file a deed and sell the land, a-- provided by law in such cases ; or they had the right to their action of ejectment; or if the land were still vacant and unoccupied, to re-enter and take possession.

They adopted the latter course. This act on their part, as shown by the proof, was a rescission of the contract, and they have since held and maintained their right to the land, because of the failure of the purchaser to comply with his part of the contract. Thus repudiating the contract, and repossessing themselves of the land, with the intent to hold it as their own, and thereby to restore themselves to the condition in which they were before the contract was made, there was an implied obligation on their part to restore the other party to the condition in which he was before the contract, as far as the same could be done with equal and exact justice to both parties.

Gray & Co. were not bound to rescind, and thus give up whatsoever of advantage they might have had in the sale of the land.. They could have brought-it to sale, and if bought back by them, or bought.by another, at half the amount of their debt, the fi. fa. would still have been valid against McDaniel for the unpaid balance. Had they resorted to ejectment to recover the land, they would have stood before the court with their naked legal title, and a judgment therefor could not have been prevented under their contract of sale. Pursuing, however, neither of these remedies, the only one which remained open to them, was to avail themselves of that which they acted upon — to rescind because of the non-performance of the opposite party of his part of the contract, as allowed by section 2860 of the Code. Having elected to do this, they were in possession of both land and money; not by any legal process, nor by contract, but by their individual act. And it is to be noted also, that there is no provision in this contract authorizing the vendors to declare it forfeited for a failure to make punctual payments. And the general principle is admitted to be, that where the parties themselves have not agreed and prescribed- the right of rescission, and the circumstances under which it is to be exercised, restoration must be made. 8th Am. Rep., 688; 24th Am. Dec., 774. Does it not follow, then, that these parties should restore to the purchaser the amount of the purchase money paid, less such an amount as would prevent actual loss to them, by reason of the non-performance of the contract on the part of the purchaser?

This appears to us to be the proper rule of law governing the case ; and if the amount actually paid had been $850 of the $900 promised, and the vendors had rescinded as they did, it would hardly be claimed that they should be allowed to retain the whole amount of the money and the land besides.

The amount involved, whether great or small, cannot change a legal principle. This view seems to be in harmony with the reasoning in the case of Hudson vs. Duke, 21 Ga. 403.

Judgment reversed.